China to invest $206 bln in rustbelt province Liaoning: Media

BEIJING - China's central state-owned enterprises (SOEs) are expected to invest one trillion yuan (S$205.9 billion) in a rustbelt northeastern province over the next three years as part of a Cabinet programme to revitalise the region, state media said on Sunday.

SOEs have signed agreements or started initial work on 91 projects in Liaoning province with another 82 projects in discussion, the official Xinhua news agency said.

They have reached intent to cooperate on 183 projects, with investment in the province totalling one trillion yuan over the next three years, Xinhua said.

One of the central SOEs, China Huaneng Group, plans to pour over 6 billion yuan into a thermoelectricity project in Dalian city, the agency said.

China National Cereals, Oils and Foodstuffs Corp (COFCO) is expected to invest 13 billion yuan to build a grain distribution centre in Dalian and a sugar project in Yingkou with annual output of 1 million tonnes, it said.

In August the Cabinet announced fresh policy measures to support the lagging northeastern region, including quickening infrastructure investment and opening up state firms to private investment.

Premier Li Keqiang has already pledged to provide more support for the northeast region, which is made up of the provinces of Liaoning, Jilin and Heilongjiang.

The government will speed up the construction of railways, highways, airports, power grids and water conservation, as well as spend more on shanty town renovation.

Privately owned banks will be allowed to set up in the region.

Known as China's rustbelt, the northeast was plagued by widespread layoffs in the 1990s, when the government forced state factories to shut en masse to cull inefficient industry.

The region enjoyed an economic boom in the past decade due to Beijing's supportive policy and increased demand for raw materials and machinery products, but the revival wobbled this year as China's growth grinds towards a 24-year low.

China's factory output grew at the weakest pace in nearly six years in August while growth in other key sectors also cooled, raising fears the world's second-largest economy may be at risk of a sharp slowdown unless Beijing takes fresh stimulus measures.

The government will encourage the region to embrace technological innovations, supporting new industries, such as robots, gas turbines and high-end marine engineering equipment.

The region will step up trade and energy cooperation with Russia, Mongolia, Japan, South Korea and North Korea.

Of China's 31 provinces and regions, the three northeastern provinces were among the six with the weakest economic growth.

Liaoning's economy grew 7.2 per cent in the first six months, below the national average of 7.4 per cent. Jilin's economy expanded 6.8 per cent, and a Heilongjiang official said the province was the worst performer in all of China, with growth likely to be under 5 per cent.